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Will Andres Rodriguez' Nasuni Be The Next Big Cloud Storage Company IPO?

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We’re going to do storage, data protection, and all the synchronization of data worldwide. That is a better storage system than anything that exists today. -- Andres Rodriguez, founder and CEO of Nasuni

A Series of Forbes Insights Profiles of Thought Leaders Changing the Business Landscape: Andres Rodriguez, Founder and CEO, Nasuni…

Gartner predicts that Infrastructure-as-a-Service (IaaS) will achieve a compound annual growth rate (CAGR) of 41.3% through 2016, the fastest growing area of public cloud computing the research firm tracks. Global spending on public cloud services is expected to grow 18.6% in 2012 to $110.3B, achieving a CAGR of 17.7% from 2011 through 2016. The total market is expected to grow from $76.9B in 2010 to $210B in 2016. These two trends converge with the concept of Storage infrastructure as a service (SIaaS), a place where innovative company Nasuni plays.

Nasuni provides a consolidated storage solution for the distributed enterprise that offers build-in backup, replication and offsite protection using an on-site appliance connected to the Cloud to help company’s reduce their storage costs. The company offers large companies a service that gives everyone fast access to secure and centrally managed storage, no matter where they are located. The Boston-Based Nasuni has about 65 employees and has raised $42 million in venture capital since its founding in 2009 from Flybridge Capital Partners of Boston, North Bridge Venture Partners of Waltham and Sigma Partners of Boston. Nasuni posted strong financial results in 2013, and engineered several key innovations to its product. In November, the company’s founder and CEO, Andres Rodriguez, received a patent for Nasuni’s core technology, UniFS – the ability to create a versioned file system from the object-based storage infrastructure of public cloud storage providers.

“The idea behind Nasuni is that we are taking these traditional storage systems that are making changes, lots of reads and writes and lots of things happening, and we’re going to freeze time. We’re going to take a picture in time, and we’re going to save that picture perfectly, immutable, stabilize it forever in the back end system. And so our systems technically look like this infinite stream in time where it’s an infinite set of frames, and you can always roll back to any point in time. We’re doing this at the level of the storage controller, but we’re not storing it in any box. We’re storing it in this infinite cloud or clouds that are in the back end,” says Rodriguez. The company focuses on verticals like architecture, engineering, construction, manufacturing, and legal.

“We’re going to do storage, data protection, and all the synchronization of data worldwide. That is a better storage system than anything that exists today. Today to be able to accomplish that, I need to have storage, a backup application, a replication application, which is all hugely costly and very complex because the center of the universe for storage has been the box and how to protect the box; and how to get data from this box to that box. For us, the storage is all in the cloud,” continues Rodriguez.

Rodriguez says his customers tell him they don’t want to own any of their infrastructure any more. “Ownership is overrated. Ownership means that I buy something from you, and when we have to downsize, I can’t get rid of it. And when we expand all of the sudden, I have your old box that I can’t operate. What customers really want is something that breathes in and out with their business cycles. So can you take that asset, which is the single most mission critical layer of infrastructure and transform it to this model where there’s no ownership of anything. And that’s Nasuni’s mission. The company name comes from the combination of NAS, which stands for Network Attached Storage, which is the workhorse of storage technology and unifying the storage model. So you put NAS and UNI together and you get Nasuni,” says Rodriguez.

Storage and scaling large data systems is something Andres knows well and has been working on for the past twenty years in one form or another. “I was actually lucky to be a physicist in the era when the internet was just being born. Although I wasn’t a great physicist, I was a very good computer programmer. And at that time science needed great people in computers because the experiments were getting bigger. Data was getting bigger and you needed people that knew how to crunch it, and so my expertise in grad school at Boston University was building very large distributed systems,” says Rodriguez of his early days in academia. He and his colleagues lashed workstations together and put them on a network, which was a cost effective way to run these huge simulations on condensed matter and particle physics. These problems were similar to the challenges the internet was facing at the very beginning. Scientists could transition well into business because everyone was hungry for good programmers at the time. He worked with a series of media companies in New York that wanted to have an internet presence and found it very challenging to build their own.

“I partnered with Andy Sack and Shaun Cutts from Brown University who had a vision for a search engine that connects people with people. And you can see it was just the beginning of the social network idea. So we started a company called Abuzz that did essentially that and two years later in 1999 The New York Times comes knocking on our doorstep and bought the company for $30 million because we had a very good reputation for building this massive systems. “The acquisition of Abuzz is a timely and strategic fit as we build our Internet business to scale and is a major building block in our digital future,” Martin Nisenholtz, CEO of Times Company Digital, said in a statement at the time. Andres was then named CTO of the company. “It was all about building this highly global distributed, robust, scale-able infrastructure well beyond anything we could build ourselves. “And I thought, ‘wow, this is truly the future’,” says Rodriguez.

“I looked at the NetApp systems and the EMC systems and the traditional storage systems, and I thought the design is wrong. The design of these storage systems is really about building very high performance storage for things like databases and things that are relatively small. But there is this huge thing that you could see coming. You could feel the pressure in front just building up of media companies that would need video and photography and writing and audio recordings. And all that content had to be connected to the network, and it had to be available so that when you search it, you got it in sub-second speed. That moment of insight was probably one of the best points in my career. I left the Times, went down to the New York Public Library and just sat there for a few weeks and all I did all day long is design a very scalable storage system—a very durable, very scalable storage systems where you could put the archives of The New York Times and 100 years later you would find them, no matter what–an infinite information repository architecture,” Rodriguez continues.

Andres then started his second company called Archivas, which is essentially a giant storage system for very big media archives or any type of file data that companies need to keep forever. Archivas then partnered with Hitachi Data Systems, which is a big storage system provider. “During this time I met two people that would be at the center of my career. One was a storage engineer from EMC, and the other one was a storage engineer from Akamai. These were the two top guys from the two top companies and I moved earth heaven and earth to get them to join this tiny little company in Boston, Archivas, with this crazy guy that didn’t really know the storage business and just thought that we could really disrupt it with this new system. And so the three of us built the company, that’s Rob Mason, a legend from his days at EMC, on one side who is my co-founder for Nasuni today and David Shaw on the other side who is our Chief Architect for the company,” says Rodriguez.

Hitachi bought the company for$130 million in 2007 as a product portfolio for their storage business. However, Rodriguez saw the model changing again. “I tried to convince Hitachi that what you need to do is to build gigantic data centers, host Archivas clusters in it, and then connect those data centers to every single storage device that we ever sell the customer. That way, every device will just be an access point to these giant repositories of storage,” says Rodriguez. At that time, the big Cloud services from Amazon and others were starting to take shape. Hitachi wasn’t ready to move that fast and was more concerned about cannibalizing its existing storage hardware business. So Rodriguez, Mason and Shaw set off on their own again and founded what eventually become Nasuni.

Rodriguez attributes his success to his background growing up in Venezuela, where the family business Cementos de Venezuela made cement (sold to CEMEX a decade ago) and Polar, which was at one time the largest beer company, Polar, in South America. “When I left the country in ‘83 – my father is an engineer and he wanted me and my brother and sister to be educated in the U.S– my uncles who ran all these companies said to me, ‘Andres, find something that everyone needs and that they’re willing to pay you for it.’ So I sell infrastructure and storage. I had that emotional connection to it where I could see business being built on ‘cement’, if you will. The great thing about America is that no matter how unique you are, you’ll find a place if you’re ambitious and you’ll thrive within that place and it doesn’t mean that it will all happen in a direct straight line, says Rodriguez.

What does the future hold for Nasuni? “We’re on track to do about $10 million in recurrent revenue and have customers now that pay the company half a million dollars a year to run their storage systems. We grew revenue two and a half times from last year. And I anticipate that we’ll do probably about a little less than that this year. We are probably in the last round of funding before we’re headed to the public markets three years from now,” concludes Rodriguez.

Bruce H. Rogers is the co-author of the recently published book Profitable Brilliance: How Professional Service Firms Become Thought Leaders now available on Amazon http://amzn.to/OETmMz